Florida’s Proposed HOA Termination Statute: What Homeowners Should Know

Florida homeowners associations have long been a cornerstone of community governance. Proposed legislation known as House Bill 657 or HB 657 could significantly change how these associations operate and, in some cases, lead to their dissolution. If enacted, HB 657 would take effect on July 1, 2026 and would introduce a clear statutory process for terminating homeowners associations for the first time in Florida.

The Potential Downsides

Decline in property values and curb appeal
Realtors and community advocates warn that dissolving an HOA may lead to a decline in curb appeal and overall neighborhood aesthetics. HOAs typically enforce architectural guidelines and landscaping standards that help maintain uniformity. These features attract buyers and protect long term property values. Without these standards, neighborhoods may become inconsistent in appearance, reducing marketability and resale value.

Unclear responsibility for infrastructure and maintenance
HOAs often manage critical infrastructure such as private roads, drainage systems, and shared amenities like pools and parks. If an HOA dissolves, homeowners may face uncertainty about who is responsible for maintenance and repairs. These responsibilities could fall directly on individual homeowners, leading to disputes or neglected facilities.

Unexpected financial liability
Without an HOA, homeowners may become individually responsible for expenses that were previously covered by association dues. This could include insurance, maintenance, or repairs to shared property. These unexpected costs may create financial strain for some homeowners.

Neighborhood division and governance instability
HB 657 allows a petition to begin the dissolution process with signatures from just 20 percent of voting members. This relatively low threshold could result in repeated attempts to dissolve an HOA, creating tension among neighbors and weakening community cohesion. Governance instability may also discourage potential buyers.

Inconsistent enforcement of deed restrictions
Without a centralized governing body, enforcing deed restrictions may become difficult. Homeowners could face inconsistent standards and increased legal uncertainty, particularly in communities with shared property or common use areas.

The Upside for Homeowners

Despite these concerns, HB 657 offers several potential benefits. The bill provides a clear legal pathway for dissolving an HOA that no longer serves the community’s best interests. This may reduce the perception of HOAs as overly powerful entities with limited accountability.

Judicial oversight through the new Community Association Court Program would add transparency and structure to the termination process. The bill also eliminates presuit mediation, which could reduce delays and legal costs in certain disputes.

In addition, HB 657 requires updates to HOA governing documents, including the addition of Kaufman language. This language allows governing documents to automatically align with future changes in Florida law, reducing the risk that outdated provisions become unenforceable.

Why HOAs Matter and Why This Bill Raises Concerns

HOAs play a vital role in preserving property values and maintaining neighborhood standards. They enforce architectural guidelines, manage landscaping, and maintain shared amenities that enhance quality of life. These services not only protect long-term investment but also foster community stability. HB 657’s streamlined termination process could jeopardize these benefits, leaving homeowners to navigate complex issues of governance, cost-sharing, and liability on their own.

Key Highlights of HB 657

Feature	Details
Petition Threshold	20% of voting members must sign a petition to initiate dissolution.
Approval Requirement	Two-thirds of all voting interests must approve the termination plan at a meeting held within 60 days.
Judicial Oversight	A new Community Association Court Program will review and approve termination plans.
Asset Distribution	Remaining assets will be distributed according to the termination plan.
Penalties for Interference	Board members who obstruct the process may face fines up to $5,000 and removal from office.

What This Means for Florida Communities

HB 657 represents a significant shift in HOA governance across Florida. While it may empower homeowners and promote transparency, it also introduces challenges that could affect property values, financial responsibility, and neighborhood harmony. Homeowners should carefully consider these factors before supporting or opposing the proposed legislation.

Need Legal Guidance? Contact us

If you are a homeowner, board member, or developer, understanding HB 657 before it takes effect is critical. Our attorneys regularly advise Florida communities on HOA governance, compliance, and dispute resolution. Contact us today to discuss how this proposed law could impact your community and how to prepare for potential changes.